The U.S. Securities and Exchange Commission (SEC) is looking into claims made by a whistleblower concerning international mining conglomerate Rio Tinto. According to reporting by the Financial Times, the SEC has not announced an investigation. They are examining allegations that Rio Tinto was aware of problems at its $6.8 billion underground copper mine extension project in Mongolia months before publicly acknowledging that it was delayed and over budget.
Earlier this year, Richard Bowley, a former head of strategic projects in Mongolia, stated that he was filing a whistleblower complaint with the SEC. Bowley claims that he repeatedly warned senior executives of problems at the Oyu Tolgoi (OT) project, Rio Tinto’s biggest copper growth project, and that Rio Tinto’s disclosures about the project came over a year after he first alerted the company. He alleges that, during this delay in acknowledgment, Rio Tinto intentionally misled investors. Bowley is also suing Rio Tinto for wrongful discharge following his termination in March 2019.
This case serves as a strong example of the global reach of the SEC’s Whistleblower Program. Even though Bowley is English, Rio Tinto is headquartered in London, and the mine is located in Mongolia, the SEC can still prosecute Rio Tinto because the Dodd-Frank Act whistleblower laws generally apply to all publicly traded companies. Thus, if Bowley’s complaint leads to a successful enforcement action against Rio Tinto, he could be entitled to an SEC whistleblower award ranging from 10-30% of the monetary sanctions levied in the case.
The global reach of the SEC’s whistleblower laws has aided in the program’s success. According to the SEC, nearly 4,000 whistleblowers from 122 countries filed claims in the United States between 2011 and 2019.
According to the Financial Times article, Rio Tinto stated that it was “not aware of any investigation related to OT disclosure by the SEC” and had “consistently complied with its disclosure obligations” in relation to the project.